ISLAMABAD: The Drug Regulatory Authority of Pakistan (Drap) has formulated a policy aimed at manufacturing raw material for production of medicines in the country.

Currently, Pakistan produces about 15pc of the raw material while the remaining 85pc is imported mostly from China and India.

The policy document, prepared as per directions of the federal cabinet, suggests that pharmaceutical companies will be facilitated through a one-window operation to get early issuance of licences and approval for loans.

According to the document, available with Dawn, in pursuance of the federal cabinet’s decision, Drap has notified the promotion and growth of active pharmaceutical ingredient (APT) industry.

It says Pakistan’s API [raw material] industry is in its initial phases and requires policies that promote its expansion. Currently, 23 pharmaceutical manufacturers possess the licence to manufacture APIs. These firms produce about 15pc of APIs while the remaining 85pc is imported.

Among locally produced bulk drug substances, the national demand of 16 APIs is met and most of the national leading brands are using the aforementioned local APIs in their products. The global API market is currently over $180 billion and projected to be over $250 billion by 2024.

“Owing to its great potential and attaining self-reliance, it is desirable to invest in this sector. However, investors shy away from setting up manufacturing plants due to complex nature of manufacturing processes, substantial cost of research and development (R&D) involved, readily available APIs from international market and lack of incentivisation,” it stated.

Some of the short-term steps proposed in the policy document include reduction in customs duty on chemicals and machinery items by Tariff Policy Board for five years. Any reduction in the import prices (dumping prices) of the material manufactured in Pakistan by foreign suppliers should immediately be supported through levy of anti-dumping duty. API manufacturers should avail financing facilities already available under the export finance scheme (EFS) and the long-term finance scheme provided by State Bank of Pakistan. API manufacturers may retain export earnings to the tune of 15pc of freight on board value of their export’s proceeds same as already allowed by Ministry of Finance for pharmaceutical sector.

Drap will establish a cell for guidance to applicants/investors, and to coordinate with relevant ministries on timely completion of requisites for issuance of licences and registrations applied to it on a fast-track basis.

Long-term incentives include establishment of APIs mega parks with all the required facilities. The Ministry of Industries and Production shall develop a policy to incentivise a naphtha cracking plant for promoting basic chemical and pharmaceutical industry.

Drap Chief Executive Officer Dr Asim Rauf told Dawn that it had been decided to encourage manufacturing of APIs so that the pressure on imports could be reduced.

“We are going to open a one-widow operation and will encourage companies to apply for licences to manufacture chemicals. We will prepare a list of companies, interested in manufacturing, and will forward their names to the Ministry of Industries and Production so that they would get loans and other incentives,” he said.

Replying to a question, Dr Rauf said currently most of the ingredients were being imported from China and India.

“There are three to four companies/investors interested in manufacturing chemicals in Pakistan which will benefit the country and in future we will be able to export chemicals. I hope that more groups will show interest to manufacture APIs and bridge the gap between imports and exports,” he said.

Published in Dawn, March 5th, 2022